John Wright Posted October 1, 2008 Share Posted October 1, 2008 Remember it is not the Government which puts up the compensation long term. It is financed by levies on the banking industry so the tax payer does not pay, other banks pay. So safer bankers pay for unsafe risky bankers and that puts up interest rates all round and makes for cautious lending or no lending and results in a 1929 depression. It is very unlikely that an IOM subsidiary would fail on its own as most do not trade as such, They only take deposits. So Nationwide IOM takes in deposits but if you borrow on a mortgage it is the UK Nnationwide you get it from and mortgage your house to, Nationwide IOM lends all its money to Nationwide UK in the wholesale money market in theory, but direct in practice, so the problem only arises if Nationwide UK goes bust and cannot pay back Nationwide IOM which then cannot pay back its customers. Commercial customers are not covered by the UK scheme any way so Nationwide IOM get nothing. So is the parent warranty any good? Not if the parent goes bust. Is the compensation scheme any good? Well it saves some personal grief. many depositors have lots of snamll sums with lots of institutions What about the €700 billion US and the UK and EU nationalisations, the choice is stark, do something, anything, to keep the system working and try and avoid a 1929 or we have a full blown recession which last time only ended in war. Link to comment Share on other sites More sharing options...
WTF Posted October 1, 2008 Share Posted October 1, 2008 Is the compensation scheme any good? Well it saves some personal grief. many depositors have lots of snamll sums with lots of institutions the snag over here is that the sum guaranteed is per PERSON, not per account, so having lots of little accounts is only a help if they are at non directly connected banks. i wonder what would happen if you lost 15k in a little account but didn't loose the others, would the government say you still had the rest so you still had over 15k and they weren't paying you the 15 you lost. Link to comment Share on other sites More sharing options...
BigDave Posted October 1, 2008 Share Posted October 1, 2008 If you're really that concerned about your savings and the shortcomings of the compensation scheme here, then the best bet is to put your money in an NS&I account via the IOM Post Office. It's 100% backed by the UK treasury so in theory should be the last one standing if all others have gone to the wall. If the UK goes bust you lose, but if it gets to that stage the pound will be pretty much worthless anyway. Link to comment Share on other sites More sharing options...
ai_Droid Posted October 1, 2008 Share Posted October 1, 2008 If you're really that concerned about your savings and the shortcomings of the compensation scheme here, then the best bet is to put your money in an NS&I account via the IOM Post Office. It's 100% backed by the UK treasury so in theory should be the last one standing if all others have gone to the wall. If the UK goes bust you lose, but if it gets to that stage the pound will be pretty much worthless anyway. Northern Rock is also nationalised and has much better rates Link to comment Share on other sites More sharing options...
John Wright Posted October 1, 2008 Share Posted October 1, 2008 Is the compensation scheme any good? Well it saves some personal grief. many depositors have lots of snamll sums with lots of institutions the snag over here is that the sum guaranteed is per PERSON, not per account, so having lots of little accounts is only a help if they are at non directly connected banks. i wonder what would happen if you lost 15k in a little account but didn't loose the others, would the government say you still had the rest so you still had over 15k and they weren't paying you the 15 you lost. Per person per bank so you can have lots of 15,000's lying around Link to comment Share on other sites More sharing options...
Moghrey Mie Posted October 1, 2008 Share Posted October 1, 2008 BTW. In these unprecedented times, the Island's own g'tee scheme ("DCS") looks pretty much useless:- claim 75% of max £20k = £15k (per person) - but even this you probably wouldn't see for years and years Thanks, Andrew It's insulting to depositors here considering Ireland's is 100,000 euro and the UK's is being raised to £40K (at least I think that's what I heard on some news or other today). What will it take for the IOM Govt to raise it from £15,000? The Positive Action Group www.positiveactiongroup.org is trying to get IOM government to raise the level of Depositors' Compensation over here. On Tynwald Day they had a competition to quess the present level (£!5,000) and nobody knew what it was! I wonder how many people know now. Link to comment Share on other sites More sharing options...
andrew00 Posted October 1, 2008 Share Posted October 1, 2008 On another thread - Mutley has just noted that the Irish Govt scheme covers the Irish banks here. See: http://www.angloirishbank.co.im/ for details. I also spoke to Irish Perm IOM this morning, and they said they are covered by it and will be writing to depositors accordingly. But it is reassuring to actually see something "official" in writing already, so thank you for that BTW. in case any one is interested, I just saw this topic is also being discussed on: http://forums.moneysavingexpert.com/showth...html?p=14604839 Link to comment Share on other sites More sharing options...
ai_Droid Posted October 1, 2008 Share Posted October 1, 2008 Per person per bank so you can have lots of 15,000's lying around Also means joint accounts are effectively 30k, as I understand it. Link to comment Share on other sites More sharing options...
pongo Posted October 1, 2008 Share Posted October 1, 2008 The Positive Action Group www.positiveactiongroup.org is trying to get IOM government to raise the level of Depositors' Compensation over here. It would have to be a credible guarantee. It would be good if Manx Radio could arrange for an expert to interview someone from the IOM Govt about these various matters and how they specifically affect us locally. It would also be interesting to hear the various local experts discussing these issues with each other. Link to comment Share on other sites More sharing options...
Snaipyr Posted October 1, 2008 Author Share Posted October 1, 2008 The Positive Action Group www.positiveactiongroup.org is trying to get IOM government to raise the level of Depositors' Compensation over here. It would have to be a credible guarantee. It would be good if Manx Radio could arrange for an expert to interview someone from the IOM Govt about these various matters and how they specifically affect us locally. It would also be interesting to hear the various local experts discussing these issues with each other. Calling Stu Peters! Link to comment Share on other sites More sharing options...
bluemonday Posted October 1, 2008 Share Posted October 1, 2008 Has Champ the Wonderdog given his opinion yet? Link to comment Share on other sites More sharing options...
Moghrey Mie Posted October 1, 2008 Share Posted October 1, 2008 The Positive Action Group www.positiveactiongroup.org is trying to get IOM government to raise the level of Depositors' Compensation over here. It would have to be a credible guarantee. It would be good if Manx Radio could arrange for an expert to interview someone from the IOM Govt about these various matters and how they specifically affect us locally. It would also be interesting to hear the various local experts discussing these issues with each other. IOM government seems to prefer to keep quiet and pretend these things don'r affect us. Link to comment Share on other sites More sharing options...
Slim Posted October 1, 2008 Share Posted October 1, 2008 IOM government seems to prefer to keep quiet and pretend these things don'r affect us. The government has to balance between protecting depositors and keeping the island attractive to banks. It's not really great timing to put extra pressure on the banks balance books right now. Worth noting, Gurnsey, Bermuda, Cayman and Jersey don't have a similar scheme. We're quite unusual as an offshore to have one to the credit of our government, and it's an extra cost for the banks here. Link to comment Share on other sites More sharing options...
oldmanxfella Posted October 1, 2008 Share Posted October 1, 2008 I also spoke to Irish Perm IOM this morning, and they said they are covered by it and will be writing to depositors accordingly. As I understand it the Irish Government statement says "The Government has decided to put in place with immediate effect a guarantee arrangement to safeguard all deposits....with the following banks: Allied Irish Bank, Bank of Ireland, Anglo Irish Bank, Irish Life and Permanent, Irish Nationwide Building Society and the Educational Building Society and such specific subsidiaries as may be approved by Government following consultation with the Central Bank and the Financial Regulator" I'd want to see it in writing as I can't believe, given the recent scandals involving Irish offshore account holders, that the Irish government actually wants to fund the cost of covering offshore businesses who they have accused of robbing them of revenue over the years. Link to comment Share on other sites More sharing options...
Mutley Posted October 1, 2008 Share Posted October 1, 2008 Is the compensation scheme any good? Well it saves some personal grief. many depositors have lots of snamll sums with lots of institutions the snag over here is that the sum guaranteed is per PERSON, not per account, so having lots of little accounts is only a help if they are at non directly connected banks. i wonder what would happen if you lost 15k in a little account but didn't loose the others, would the government say you still had the rest so you still had over 15k and they weren't paying you the 15 you lost. Per person per bank so you can have lots of 15,000's lying around Yes but.... "Compensation is paid out of levies collected from other banks in the Isle of Man. Levies are collected at a maximum of £250,000 per bank per year. As there are a limited number of banks which pay levies, it may take many years for compensation to be paid to depositors. This period will also vary according to when liquidation proceeds are collected from the failed bank and how much is recovered. There is no "standing fund" of compensation (i.e. money is not collected before a bank failure)." source - http://www.fsc.gov.im/investor/dep_comp.xml Link to comment Share on other sites More sharing options...
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